Non-Disparagement Agreement Template & Guide

A non-disparagement agreement is the clause people reach for when a relationship ends and neither side wants the other badmouthing them afterward. It shows up in severance packages, settlements, business sales, and partnership splits. Done right, it lets both parties walk away and move on. Done carelessly, it either protects nothing or crosses a legal line that makes it unenforceable.

This guide covers what a non-disparagement clause actually does, how to draft one that holds up, the carve-outs the law requires you to include, and the drafting errors that get these clauses thrown out.

What Is a Non-Disparagement Agreement?

A non-disparagement agreement is a contract, or more often a clause within a larger contract, in which a party promises not to make statements that damage another party's reputation. The restricted statements are usually negative remarks about a person, a company, its products, or its leadership.

The key thing that separates non-disparagement from related promises: it can cover true statements. A defamation claim only works against false statements. A non-disparagement clause goes further and bars disparaging remarks whether or not they are accurate. That is why it is a contract obligation rather than something the law gives you for free.

You will rarely see a standalone "non-disparagement agreement" document. It almost always lives inside something bigger:

• A severance agreement between an employer and a departing employee
• A settlement agreement resolving a lawsuit or dispute
• A business purchase agreement where the seller agrees not to trash the buyer
• A partnership dissolution or co-founder separation

Because it travels inside other contracts, the clause has to fit the deal around it. A severance non-disparagement clause reads differently from one in a vendor settlement.

Non-Disparagement vs. NDA vs. Non-Compete

These three get mixed up constantly because they sit next to each other in employment and exit documents. They protect different things.

• A non-disparagement clause stops negative statements about the other party.
• A non-disclosure agreement stops the sharing of confidential information.
• A non-compete restricts where a person can work next.

A single severance package might contain all three. Confusing them in drafting is a real problem: writing "you may not discuss the company" when you mean "you may not disparage the company" sweeps in protected speech and weakens enforceability. Keep each obligation in its own clause with its own language.

What a Non-Disparagement Clause Should Cover

A workable clause answers four questions: who is bound, what they cannot do, who they cannot do it to, and what exceptions apply.

Who Is Bound

Name the parties precisely. In an employment exit, the employee is usually the bound party. If the agreement is mutual, the employer is bound too, but here is the practical wrinkle: a company speaks through many people. A promise that "the Company will not disparage" is hard to enforce because you cannot police every employee. Better drafting limits the company's obligation to its officers and senior managers, or to a named list of people, so the promise is something the company can actually keep.

What Counts as Disparagement

Define the restricted conduct. Vague language like "say anything bad" invites argument. Spell it out:

• Statements that are negative, derogatory, or damaging to reputation
• Made to any third party, including online posts, reviews, and social media
• Whether spoken, written, or implied

Some clauses add an objective standard, restricting statements that would "tend to diminish the reputation" of the other party, so enforcement does not turn on hurt feelings alone.

Who Is Protected

Identify the protected party and whether protection extends to related people: a company's products, executives, board, or affiliates. The broader the protected group, the more the clause restricts the bound party, so this is a negotiation point, not a default.

The Carve-Outs

This is the part drafters skip and regret. A non-disparagement clause cannot override the law. Build in exceptions for:

• Truthful testimony under subpoena or in a legal proceeding
• Reports to government agencies (EEOC, SEC, NLRB, DOL, and equivalents)
• Statements required by law or court order
• Protected concerted activity, including, in the U.S., discussing wages and working conditions

Leave these out and you do not just lose the carve-out. You can void the clause entirely and, in employment cases, draw regulatory penalties.

Mutual vs. One-Sided Clauses

A one-sided clause binds only one party, typically the departing employee or the settling defendant. It is common and often what the stronger party wants.

A mutual clause binds both sides equally. It is usually easier to enforce and easier to get signed, because the bound party is more willing to accept a restriction the other side also accepts. If you are the employee or the smaller party, push for mutuality. If you are the employer, decide whether a limited mutual promise, covering only named executives, is worth the goodwill it buys.

When non-disparagement appears in a settlement agreement, mutuality is close to standard. Both sides typically want the dispute to disappear quietly, and a one-way clause signals that one party still intends to talk.

How to Write a Non-Disparagement Clause: Step by Step

Step 1: Decide where it lives. In most cases the clause goes inside a severance, settlement, or sale agreement rather than standing alone. Match its tone and definitions to that host document.

Step 2: Name the parties and their scope. State who is bound and who is protected. For a company, limit its obligation to specific people so the promise is keepable.

Step 3: Define disparagement. Describe the restricted statements with enough specificity that a neutral reader knows what crosses the line. Cover spoken, written, and online channels.

Step 4: Add the legal carve-outs. Include the exceptions for testimony, agency reports, legally required disclosures, and protected speech. Do this even if the other side does not ask.

Step 5: Set the remedy. Decide what happens on a breach. Options include liquidated damages, forfeiture of unpaid severance, or the right to seek an injunction. Tie the remedy to something measurable.

Step 6: Set the duration. Many clauses run indefinitely, but a defined term, such as the life of the business relationship plus a few years, is easier to defend as reasonable.

Step 7: Confirm consideration. The bound party has to get something of value, severance pay, a settlement sum, a release of claims, for the promise to stick. A clause added after the fact with nothing new exchanged may fail.

Remedies: What Happens When Someone Breaches

A clause with no consequence attached is closer to a request than a rule. Spell out what happens on a breach so the other party has a reason to honor it.

Liquidated damages set a fixed dollar amount per violation. They work when actual harm is hard to quantify, which reputational harm usually is, but the figure has to be a reasonable estimate of likely damage, not a penalty, or a court will strike it.

Forfeiture or clawback is common in severance. If the former employee disparages the company, they forfeit remaining payments or must return what they received. This is often more practical than suing for damages.

Injunctive relief lets the protected party ask a court to order the statements stopped. Pair it with language acknowledging that breach causes irreparable harm, which strengthens the request.

Reputational damage is genuinely hard to prove in dollars, so the remedy structure often matters more than the underlying promise. A clause backed by a clear forfeiture provision gets honored far more reliably than one that just says "you agree not to disparage."

Common Mistakes That Void the Clause

Banning protected speech. A clause that stops someone from reporting harassment, fraud, or safety violations to an agency is not just unenforceable. In the U.S., the NLRB and SEC have penalized employers for using overbroad non-disparagement and confidentiality language. Always include the carve-outs.

Defining disparagement too broadly. "You may not say anything about the Company" reads as a gag order and invites a court to throw it out. Restrict damaging or derogatory statements, not all speech.

Making a company's promise impossible to keep. "The Company will not disparage the Employee" cannot be enforced against every worker. Limit it to named individuals or senior leadership.

Forgetting consideration. Adding the clause to an existing relationship with nothing new offered leaves it vulnerable. Tie it to severance, a settlement payment, or a mutual release.

Treating it as an NDA. Confidentiality and non-disparagement are different obligations. A non-solicitation agreement and an NDA each cover ground this clause does not, so use separate, purpose-built language for each rather than one paragraph that tries to do everything.

No duration or remedy. A clause with no end date can be challenged as unreasonable, and one with no stated consequence gives the other party little reason to comply.

Sample Non-Disparagement Language

A clause does not need to be long to work. Here is the shape of a mutual version, with the pieces a court looks for:

Each party agrees that it will not make, publish, or communicate to any person or in any public forum any statement that is disparaging or defamatory of the other party, its products, services, officers, or directors. This restriction does not apply to truthful statements made in response to a subpoena, in a legal proceeding, to a government agency, or where otherwise required by law, and nothing in this section limits either party's right to engage in legally protected activity.

Notice what the example does. It names the channels (public forums included), names the protected group (officers and directors, not every employee), and folds the carve-outs into the same sentence so there is no doubt they apply. A one-way version simply replaces "each party" with the bound party's name and leaves the protected party free to speak.

You would then attach the remedy and duration separately, since those depend on the host agreement. In a severance context, for instance, you might add that a breach forfeits any unpaid installments. Avoid copying boilerplate blindly: the same clause that fits a business sale can be too aggressive for an employee exit, where regulators scrutinize the language more closely.

When to Use a Non-Disparagement Agreement

• Severance and exits. When an employee leaves, especially after a dispute, both sides often want assurance the other will not air grievances publicly. A separation agreement is the usual home for it.
• Settling a dispute. Resolving litigation works best when neither party continues the fight in public.
• Selling a business. Buyers want the seller's silence, not a former owner publicly questioning the new operation.
• Ending a partnership. Co-founders or partners who split want to protect the venture's reputation and their own.

If your situation involves none of these, you probably do not need a standalone clause. Non-disparagement earns its place when a relationship is ending and reputation is on the line.

Related guides

• Hold Harmless Agreement Template: How to Write a Hold Harmless Clause
• Mutual NDA Template: How to Write a Mutual Non-Disclosure Agreement
• Non-Circumvention Agreement Template (NCND)
• Non-Solicitation Agreement Template: How to Write a Non-Solicitation Agreement
• NDA Contract Template: How to Write a Non-Disclosure Agreement

Generate Your Non-Disparagement Agreement with Contractable

A non-disparagement clause is short, but the details, the carve-outs, the right scope for a company promise, the remedy that fits the deal, are what decide whether it holds up. Contractable generates customized non-disparagement language and the agreements that house it, with the required legal carve-outs built in, so you get a clause that protects your reputation without crossing a line that voids it. No lawyers or legal knowledge required.